LEADER OF THE PACK

Ecuador 2013 | INDUSTRY | INTERVIEW

TBY talks to Fernando Agudelo, Executive President of General Motors Ómnibus BB Del Ecuador, on the company's evolution, the value it places on human capital, and its widening portfolio.

Fernando Agudelo
BIOGRAPHY
Fernando Agudelo joined Ómnibus BB in 2011 as the CEO, and is responsible for managing the operations of the branch office in Ecuador. He is also a key member of the Andean Committee of GM and the Board of Directors of GM South America. In this role, he is responsible for reporting directly to the President of GM South America.

General Motors Ómnibus BB Del Ecuador has been in Ecuador for almost 40 years. How has the company evolved during this period?

Around 37 years ago, a Hungarian entrepreneur set up OBB's first plant in Ecuador to assemble buses. His vision and leadership drove the company's first years, and in 1981 General Motors Corporation became a shareholder. This strengthened both companies in the Ecuadorean market, giving the brand a wider and more attractive portfolio of products, and developing the automotive industry in Ecuador. Ever since then, we have been constantly innovating and remaining at the forefront of the industry, which has brought about a preference for our products among Ecuadorean consumers. We are the leading company in terms of variety of products; currently we have around 50 models available on the market, ranging from small vehicles to trucks. Our assembled products are highly recognized in Ecuador for their quality. Some 80% of what we sell is assembled at our plant. In terms of distribution and after-sales services, we are the brand with the highest penetration in the entire country. We have wide coverage in points of sale and service, being present in most of Ecuador's provinces, and at the same time we continue to expand our network of after-sales service points. We believe that a company with such a long tradition as General Motors must look after its clients, and we do so by combining high-quality products with an extensive distribution and after-sales network. GM OBB enjoys well-deserved prestige in Ecuador. It is also a major employer, with 1,500 people employed directly by the company and approximately 9,500 workers in the automotive industry supported indirectly.

How large is your distribution and after-sales service network?

We are constantly expanding this network by signing new partnerships, or building new dealerships. We currently have 14 franchises, composed of 17 dealerships, as well as 70 points of sale, and 80 after-sales service points.

What are some of the most popular models in your portfolio?

The Chevrolet Sail model, launched over a year ago, is the most successful model in our portfolio. We have sold over 1,000 vehicles of this model every month since its launch. With our large product portfolio, we have been able to reach all segments of society in all regions of Ecuador, paying special attention to the five cities with most market penetration: Quito, Guayaquil, Ambato, Ibarra, and Manta.

“In 2012, we were the first CKD plant in the world to reach Level III, the highest quality level in GM."

Is the company planning to launch any new models in the near future?

In 1H2013, we launched the 4x4 Trailblazer and the Chevrolet Tracker, and we will soon surprise the Ecuadorean market with another new model. Innovation is our motto, and we have no doubt that this coming model will be highly successful.

How would you assess the development of the automotive industry in Ecuador?

The industry has clearly benefited from the growth of Ecuador's middle class, and experienced very significant and sustainable growth from 2009 to 2011. However, in 2012 the government introduced new legislation seeking to redress the balance of trade, bringing in quotas and new duties on assembly vehicles, which has regulated the market.

How have sales figures evolved over the past few years?

Sales in the industry were high in 2011 and 2012 (with 136,000 and 122,000 units sold, respectively). However, as mentioned above, the quotas and new taxes introduced by the government have had an effect on growth. We estimate sales of roughly 105,000 to 110,000 units throughout the automotive industry in 2013.

How will the assembling industry in Ecuador evolve over the next few years?

The raw materials that we use for vehicle assembly are imported CKDs and local parts. The government has recently promoted local manufacturing to supply assembly plants in Ecuador. We support this strategy, and are speeding up the inclusion of more locally manufactured parts in our assembly lines. In line with the government's policy of developing a more competitive industrial sector in Ecuador, we have invested a total of $71 million in new products, facilities, and cutting-edge technology over the past two years. A total of $31 million of this was invested in the third phase of a painting plant, focusing on modernization and automation. At the same time, last year we invested $9 million of our own resources in third parties, whose business is directly related to our assembly work. Last but not least, I would like to mention quality levels at our company. In 2012, we were the first CKD plant in the world to reach Level III, the highest quality level in GM. Furthermore, we have very high levels of compliance with the global manufacturing system. For these reasons, we are currently ranked among the top-three vehicle manufacturers in Latin America.

What role do exports play in your overall business activity?

Exports continue to play a very important role in our business. We export mainly to Colombia and, traditionally, we have also exported to Venezuela. In 2011, we exported products worth over $200 million, but in 2012 this figure fell to $140 million, due to restrictions in the Venezuelan market.

How important is human capital in the sector?

We have always believed that one of the keys to success is the happiness of our employees, and we constantly implement programs for the welfare of our staff and their families. At the same time, we provide ongoing training opportunities. Human capital is very important in our industry, not only as an internal policy, but also regarding our stakeholders. We paid special attention to our sales, and especially after-sales segments, due to their proximity to the customer. We know that good service makes a difference. Finally, we should mention General Motors Ómnibus BB Del Ecuador's corporate social responsibility policy. We have four pillars guiding our projects: internal social responsibility, relations with stakeholders, protection of the environment, and community relations. Some of our main projects are: Safe Driving Practices, volunteer programs focusing on education and the environment, and “Chevrolet Siempre Conmigo," a program for our employees and their families to enhance their sense of belonging.